How has the exemption of import duty on cotton benefited the textiles industry?
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Synopsis
The exemption of import duty on cotton has led to a significant drop in domestic prices, benefiting the textiles industry. Minister Pabitra Margherita highlighted the positive impact on farmers through MSP, ensuring fair returns while maintaining affordability in the market.
Key Takeaways
- 11% import duty exemption on cotton reduces domestic prices.
- Domestic prices now between Rs 51,500 and Rs 52,500 per candy.
- MSP mechanism provides 50% return over production costs for farmers.
- Cotton imports increased from 15.20 lakh bales to 41.40 lakh bales.
- CCI's MSP operations safeguard farmers from price volatility.
New Delhi, Dec 19 (NationPress) The 11 percent exemption on import duty for cotton has contributed significantly to the reduction of domestic prices, which now stand between Rs 51,500 and Rs 52,500 per candy. This development ensures that the textiles industry remains affordable, while support via the Minimum Support Price (MSP) continues to safeguard farmers, as noted in Parliament on Friday.
The Minister of State for Textiles, Pabitra Margherita, in a written response to a query in the Rajya Sabha, highlighted that since the introduction of this duty exemption, international prices for S-6 cotton have dropped from approximately 79.15 US cents per pound prior to August 19, 2025, to about 73.95 US cents per pound by December 2025, reflecting a global downward trend.
In line with these movements, domestic cotton prices have decreased from around Rs 57,000 per candy to roughly Rs 52,500 per candy. These prices are shaped by global and local supply-demand dynamics, exchange rates, and quality factors. Notably, cotton imports accounted for about 13.93 percent of total domestic consumption during the 2024-25 season, the Minister added.
Margherita elaborated on the government's support for cotton farmers through the MSP mechanism, which guarantees a minimum of 50 percent return above production costs. For the 2025-26 season, the MSP has been set at Rs 7,710 per quintal for medium staple and Rs 8,110 per quintal for long staple cotton, reflecting an increase of Rs 589 per quintal over the previous year. To prevent distress sales, the Cotton Corporation of India (CCI) has procured approximately 31.19 lakh bales valued at Rs 13,492 crore under MSP operations as of December 11, 2025, through 570 procurement centres across 149 districts in 11 states.
The Minister also indicated that cotton imports from the USA have surged to satisfy the quality and supply needs of the domestic textile sector, which utilizes about 94 percent of India's cotton. During the period of August to September 2025, following the temporary duty exemption, imports from the US aligned well with industry requirements. Overall, India's cotton imports increased from 15.20 lakh bales in 2023-24 to 41.40 lakh bales in 2024-25, effectively bridging the demand-supply gap.
These imports not only ensure the availability of specialized cotton varieties but also bolster export-driven production, enhancing the global competitiveness of India's textile industry, the Minister noted.
The CCI's procurement of cotton under MSP aims to secure fair prices for farmers. MSP operations continue to protect farmers from price fluctuations and ensure just returns, he added.
Point of View
It's crucial to highlight the positive implications of the government’s decision to exempt import duties on cotton, aligning with the nation's commitment to both the textile industry and farmer welfare. This strategic move not only stabilizes market prices but also reinforces the government's dedication to supporting local agriculture.
NationPress
20/12/2025
Frequently Asked Questions
What is the current domestic price range for cotton?
The current domestic price for cotton ranges between Rs 51,500 and Rs 52,500 per candy.
How has the import duty exemption impacted international cotton prices?
After the duty exemption, international prices for S-6 cotton fell from about 79.15 US cents to 73.95 US cents per pound.
What percentage of domestic consumption does cotton imports represent?
Cotton imports constituted approximately 13.93 percent of total domestic consumption during the 2024-25 season.
What is the MSP for cotton for the 2025-26 season?
The MSP is set at Rs 7,710 for medium staple and Rs 8,110 for long staple cotton.
How many bales of cotton has the CCI procured under MSP?
The CCI has procured around 31.19 lakh bales under MSP operations.
